If the PSUs want to compete with the private sector, why not a level playing field? Why this “teacher’s pet” attitude?

The Govt stating that it will be putting more good money to chase bad money in BSNL and MTNL is truly frustrating. Why does the Govt need a presence in these companies?

BSNL does not have the money to run operations and pay salaries. MTNL is not too far from this situation. And their operations are loss making. So why does the Govt want to bail them out, time after time? Not just a cash infusion, the Telecom Regulatory Authority of India (Trai) is already looking at the proposal of 4G spectrum allotment to these firms without auction. On the other hand, private sector companies are still paying up for the spectrum which they purchased. Today when the private sector gives service at much cheaper rates, what is the reason for these two units to remain as PSUs?

Well, if the Govt had its way, especially the BJP, it would have done away with many PSUs, privatized them. But the biggest block, like always are the trade unions. But then if employees are not getting salaries and their company is making losses, year after year, shouldn’t the unions be worried about the units shutting down soon. And that brings us to the very pertinent question – why do trade unions oppose divestment/privatization?

Or the other way of looking at this – why do most of us feel that privatization is good? Well, the first and foremost thought that comes to mind is that efficiency will go up. We feel that better products and service will be delivered and that too within a set deadline.

But for those employed in PSUs, privatizations often means longer working hours, more responsibility and accountability. It also brings forth fears of job security and that probably is the single biggest reason – they fear the hire-and-fire policy of the private sector and feel that their jobs, which in a PSU are secure till they retire will no longer be so.

Does this mean that all trade unions then are Left-aligned? Actually most of the Unions are more Right than Left and they oppose not against the administration but as an ideology – it’s a trade union and hence it has to oppose privatization; it’s like one of the tenets of the union. Also, trade unions fear that once the organization gets privatized, their wings will be clipped as unions in private sector do not have as much freedom as those in PSUs to oppose anything and everything from recruitment to other union activities. Thus trade unions fear privatization on ideological as well as their own existential fears.

A company looks at ways to maximize its profits while the trade union looks to maximize the benefit of its employees. And it is here that conflict arises – the Union feels that the company will impinge on the objectives of the employees and trade union.  

But the truth is that it is only a well-run company which can satisfy the needs of all the stakeholders – company, shareholders, customers and employees. And the Govt needs to concentrate more on its business – of running the country and getting people out of poverty, remove deaths due to hunger from India. Ironically, that it where the Govt would want the private sector to work, through CSR or for other altruistic objectives.